The local stock barometer probed new highs on Monday on selective buying of large-cap stocks ahead of the Philippines’ fourth quarter 2017 economic performance report.
The Philippine Stock Exchange index (PSEi) added 34.7 points or 0.39 percent to close at 8,950.62, a new record finish. A new intra-day peak was likewise hit at 8,975.12.
The local market mirrored mostly upbeat trading elsewhere in the region as investors shrugged off news of the US government shutting down due to the failure of legislators to enact a spending bill.
The PSEi was led higher by services, which rose by 1.1 percent. The industrial, holding firm and property counters also contributed gains.
On the other hand, the financial and mining/oil sectors slipped.
Dealers said investors were upbeat about the fourth quarter gross domestic product (GDP) results to be announced today. An inquirer poll of economists showed a consensus forecast of 6.7 percent.
Investors also bet on the favorable impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which lowers and simplifies personal income taxes, simplifies estate and donor’s taxes, expands the value-added tax (VAT) base, adjusts oil and automobile excise taxes, and introduces excise tax on sugar-sweetened beverages.
“TRAIN will boost after-tax incomes of the middle class by ore than P100 billion, which should translate to stronger consumer spending in 2018. This, coupled with accelerating infrastructure and PPP (public-private partnership infrastructure) spending and more robust exports, should drive earnings higher in 2018. We estimate it to rise by some 10 percent for the year and drive the PSEi to 9,400,” investment house First Metro Investments Corp. said in a research note issued on Monday.
Last week, the government also revised the country’s third quarter GDP growth report to 7 percent from 6.9 percent.
Value turnover for the day stood at P8.14 billion. Foreign investors supported the PSEi’s climb to new highs as there was P448.38 million in net foreign buying recorded.
Despite the PSEi’s surge to new highs, market breadth was negative. There were 128 decliners that outnumbered 99 advancers while 52 stocks were unchanged.